An investor has exchange-traded put options to sell 100 shares for $20. There is 25% stock...
An investor has exchange-traded put options to sell 100 shares for $20. There is 25% stock dividend. Which of the following is the position of the investor after the stock dividend?
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Put options to sell 100 shares for $20 |
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Put options to sell 95 shares for $15 |
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Put options to sell 125 shares for $16 |
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Put options to sell 75 shares for $25 |
Homework Answers
Answer: Correct answer is "Put options to sell 125 shares for $16"
The share dividend given in the question is same as a 5 for 4
stock split. Here, number of stocks go up by 25% and the strike
price comes down to 4/5 of its previous value.
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An investor has exchange-traded put options to sell 100 shares
for $20. There is 25% stock...
An investor has exchange-traded put options to sell 100 shares for $20. There is a 2-for-1...
An investor has exchange-traded put options to sell 100 shares for $20. There is a 2-for-1 stock split. Which of the following is the position of the investor after the stock split? Put options to sell 200 shares for $10 Put options to sell 100 shares for $10 Put options to sell 100 shares for $20 Put options to sell 200 shares for $20
An investor buys 100 shares of a stock, shorts 60 call options on the stock with...
An investor buys 100 shares of a stock, shorts 60 call options on the stock with strike price of $20 and buys 60 put options on the stock with strike price of $10. All options are one-year European options. Draw a diagram illustrating the value of the investor’s portfolio as a function of the stock price after one year.
Consider an exchange traded put option to sell 200 shares for $60 per share (strike price)...
Consider an exchange traded put option to sell 200 shares for $60 per share (strike price) for company ABC. Suppose the company ABC announces a 3 for 2 stock split, please answer the following questions. (a) What is the new strike price after the stock split ? (b) What is the number of shares that can be sold after the stock split ?
questions 21-24 please 21. The writer of a put option A. Agrees to sell shares at...
questions 21-24 please
21. The writer of a put option A. Agrees to sell shares at a set price if the option holder desires B. Agrees to buy shares at a set price if the option holder desires C. Has the right to buy shares at a set price D. Has the right to sell shares at a set price E. None of the above 22. Advantages of exchange-traded options over Over-The-Counter options include all but which one of the...
An investor creates a covered call position by purchasing 100 shares of the Tesla stock at...
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1 An investor bought 3 shares of stock A in 2010 aer ex-dividend dae activly traded...
1 An investor bought 3 shares of stock A in 2010 aer ex-dividend dae activly traded a stock during 2010-2013 She purchased 2 more shares in 2011, sold 1 share in 2012 and then sold all her holding in The stock paid $2 dividend per shane at the end of each year 2013 ater exdiv date 3 1. Flin the the blanks cun shares entted to dividends CF for buying selling siock CF trom dvidends investors net cash ow new...
A stock price is $25. An investor buys one put option contract on the stock with...
A stock price is $25. An investor buys one put option contract on the stock with a strike price of $24 and sells a put option contract on the stock with a strike price of $22.50. The market prices of the options are $2.12 and$1.95, respectively. The options have the same maturity date. Describe the investor's position and the possible gain/loss he will get (taking into account the initial investment).
Investor A owns 1,000 shares of XYZ stock. Investor A buys 10 call options on XYZ...
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Novak Incorporated’s shares are traded on the Toronto Stock Exchange. The company is authorized to issue...
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Exchange. The company is authorized to issue 1,075,000 common
shares and 100,000 $5 cumulative preferred shares. On June 30,
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issued with the following balances: Common Shares, $1,203,000; and
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questions 21-24 please
21. The writer of a put option A. Agrees to sell shares at a set price if the option holder desires B. Agrees to buy shares at a set price if the option holder desires C. Has the right to buy shares at a set price D. Has the right to sell shares at a set price E. None of the above 22. Advantages of exchange-traded options over Over-The-Counter options include all but which one of the...
1 An investor bought 3 shares of stock A in 2010 aer ex-dividend dae activly traded a stock during 2010-2013 She purchased 2 more shares in 2011, sold 1 share in 2012 and then sold all her holding in The stock paid $2 dividend per shane at the end of each year 2013 ater exdiv date 3 1. Flin the the blanks cun shares entted to dividends CF for buying selling siock CF trom dvidends investors net cash ow new...
Novak Incorporated’s shares are traded on the Toronto Stock
Exchange. The company is authorized to issue 1,075,000 common
shares and 100,000 $5 cumulative preferred shares. On June 30,
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issued with the following balances: Common Shares, $1,203,000; and
Preferred Shares, $1,075,000. The statement of retained earnings
showed retained earnings of $508,000 and other accumulated
comprehensive income of $753,000 at June 30, 2021. The dividend on
the preferred shares was two years...
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